Previously Sequestered Report Reveals Findings of Voucher Fraud at DCHA
The District of Columbia Housing Authority’s Office of Audit and Compliance (“OAC”) issued an investigative report to Executive Director Brenda Donald in January that shows an employee engaging in a brazen voucher fraud scheme in the months leading up to a ribbon cutting on December 19 for The Rise Building at Temple Courts, at 2 L Street N.W.
According to a redacted copy of the report, obtained by District Dig, a DCHA “relocation specialist” arranged for friends who are ineligible to receive housing vouchers to move into apartments reserved for individuals who have been waiting in line for up to a decade–which is a federal crime.
The report, issued by OAC on January 21, states that the employee was caught on security camera coming and going from the Rise building after work hours; it alleges that she entered a residential unit dozens of times after the tenant had signed a lease; and that she did so for personal reasons–all violations of regulations enacted by the U.S. Department of Housing and Urban Development.
Last October, HUD issued a report that found serious problems with DCHA’s Housing Choice Voucher Program–among a litany of failures, dysfunctions and signs of possible fraud. Some 30,000 applicants are on a waiting list to receive either a project-based voucher to return to their former home, or a tenant-based voucher that they can use throughout the District.
Instances of voucher fraud detailed in the Rise building report further depict a redeveloped property on what used to be city land that exemplifies the rot at DCHA–and a broken rent system that is ripe for exploitation at public expense.
After receiving a tip earlier this month from Kettler Management Company, which manages the property for MidAtlantic Realty Partners, The Dig began inquiring about allegations of fraud to Donald’s office, HUD officials, members of the D.C. Council, and the D.C. Office of the Inspector General.
According to the tipster–now corroborated by the investigative report– DCHA received an allegation from Kettler regarding voucher fraud at the Rise building on December 27, 2022. Unaware of that allegation–or the internal investigative report–D.C. Inspector General Daniel Lucas responded to The Dig’s inquiries by demanding that Donald release the report to him, in an email dated February 4–some 40 days after she received the original allegation.
In an email on Thursday, Donald’s chief of staff, Rachel Molly Joseph, denied that she and Donald sat on the report, and insisted that, “as soon as the concerns were brought to our attention, we referred them to our internal auditor for review. We are working with our internal auditor and the DC OIG to understand the implications of the findings from the initial stage of the review after which we will take any necessary actions.”
Former housing officials tell The Dig that “necessary actions” could lead down a number of paths, given the potential for complicity or assistance up the chain of command, or a willingness to look the other way.
The report itself determined that the DCHA employee in question used key fobs to access tenant residences for personal use, approved ineligible personal friends for vouchers, and failed to complete inspections prior to move-in.
In addition, it states that the employee gave preferential treatment to two ineligible tenants and used vacant units for personal reasons. Circumstantial evidence also points to 53 voucher holders out of the 65 who DCHA placed in the Rise building who bypassed the voucher screening process, according to the report.
The employee has since been terminated, according to multiple sources at the agency.
The Rise is a New Communities Initiative project, intended to provide housing to residents who DCHA uprooted from long-gone public housing developments like Temple Courts and Golden Rule.
Its partners include Housing Opportunities Unlimited (“HOU”), a charitable organization that provides relocation and other services to public housing residents, and Mayor Muriel Bowser’s Deputy Mayor for Planning and Economic Development, John Falcicchio.
A little more than a week before receiving notice of fraud allegations from Kettler, Donald appeared with Bowser for a ribbon-cutting to celebrate the 65 housing vouchers that she could cross off her waiting list–perhaps not knowing that just 12 of the residents went through the prescribed screening process, leaving dozens more at risk of being removed from the premises, the report states.
Should DCHA be unable to fill the 65 units with former residents of Temple Courts and Golden Rule, former residents of other public housing projects would have priority. If the Rise building still did not reach full occupancy, DCHA would then turn to its massive voucher waiting list, which has been closed for years.
Earlier this year, Donald reached out to thousands of displaced residents and was able to lure more than 600 of them to come out and stand in line outside the MLK Jr. Library to be processed for a housing voucher. But DCHA has not said how many have received actual housing, or when they can expect that they will.
Voucher fraud within such a dysfunctional system is an insult to injury to those who have waited years for their day to come.
The December 27 email from Kettler alleged that the employee was living at the Rise building as an unauthorized occupant with a family member who resided there, the report states. Though a community manager found a collage of incriminating photographs at the apartment and a postal service package addressed to the employee–who acknowledged having a personal relationship with the tenant–investigators were unable to conclude that the DCHA employee was living in the unit.
For that matter, not all of the observed activity at the Rise building comes with an easy explanation.
For instance, the report states that Kettler gave key fobs to five DCHA voucher program staff members– including the employee in question– to help facilitate tours for potential Rise residents. Those staff were authorized to work out of two of the units, including the one Kettler had reported as occupied by the DCHA employee.
Two of those staff members entered the building a total of 141 times, according to security camera footage, and entered multiple units on 23 of those occasions, the report states.
It also states that the employee in question entered a unit that she did not live in a total of 79 times after the resident signed the lease, on September 10, 2022, which is a violation of HUD regulations.
Two residents allowed the employee to use their key fobs to enter their respective leased units for personal reasons, states the report, and sometimes after working hours, which violates municipal regulations that limit such access to business purposes.
It is unclear what the purpose was for such comings and goings, and the report points to conflicting and false accounts to explain much of the activity.
However, one resident told investigators that, as a favor, he had given permission to the DCHA employee to have packages delivered to his unit while she was on vacation, a violation of a municipal regulation that prohibits acceptance of “any gratuities, favors, gifts or special considerations” from tenants, contractors, vendors or those doing business with DCHA.
The employee also was a “personal and childhood friend” of a resident who received a rent voucher that she had approved, according to the report.
Another finding was that the employee approved local tax credits with tenant-based vouchers under the Local Rent Supplement Program, and tax credits with non-subsidized vouchers, without going through the required eligibility process.
An HOU program administrator told investigators that at least a couple of the residents did not turn up on the “Rise Program Resident Tracking Log,” which is meant to confirm District residency, another requirement of the program.
One Rise program applicant completed her application to receive a housing voucher on November 8, 2022, and signed her lease on November 26, 2022, while residing in Maryland, according to the report.
One applicant failed to meet eligibility requirements that they must either be a former Temple Courts or Golden Rule resident, or meet the eligibility requirements of the additional categories of people in need of affordable housing.
Yet another applicant used two different Maryland addresses on their applications, the report states. Another stated that neither he nor his mother had ever lived at any of the other qualifying residences, such as Park Morton, Barry Farm, Lincoln Heights, or Richardson Dwellings, prior to the employee in question approving his placement at the Rise building.
In all, the employee approved 53 of the 65 voucher approvals to residents that failed to appear on the HOU and DCHA tracking logs, despite there being more than 100 other would-be participants who were interested in the program.
The report says investigators received an anonymous tip that the employee in question “routinely approved friends and acquaintances into the voucher programs for personal gain,” and that she would either accept a “fee” upfront for an approval or a monthly fee if the resident was receiving 100% of housing assistance for rent and utilities.
They were unable to substantiate that allegation due to time constraints, the report states; however, one ineligible resident was approved for 100% of housing assistance after the employee deemed them “compliant” to begin the application process.
“It is reasonable to conclude that [the employee]…fraudulently approved ineligible parties who are her personal friends,” the report states.
The report recommends that DCHA should update its compliance processes at the Rise building, and “remove all ineligible residents and replace [them] with residents within the four tiers of the program.” (The agency also should review tracking lists from HOU and DCHA to ensure at the beginning of the process, not the end, that all interested parties comply with their guidelines, the report states.)
And while the report recommends consideration of disciplinary action for all staff engaged in alleged voucher fraud, its does not specify how far up the chain of command the wrongdoing goes, causing investigators to observe “a lack of oversight within DCHA management which contributed to employee approval and forwarding of ineligible individuals to Kettler which violate the Rise program guidelines.”
What happens next is anyone’s guess. Lucas now has the report and the authority to refer it to federal law enforcers. At-Large Councilmember Robert White, who chairs the Committee on Housing, has it as well.
In recent weeks, White has sought to demonstrate an intent to ride herd over Donald and her minions–no small task given Donald’s propensity to play by her own rules.
Contacted by The Dig on Thursday, a spokesperson from White’s office said that he will comment on the report after the upcoming DCHA performance oversight hearing on March 2.
